Meeting summary

Date: Friday, January 15, 2021
Time: 1:30 p.m. to 3:00 p.m.
Location: Videoconference

Purpose of committee

The Committee was established to assist FSRA with its review of the distribution and administration of segregated funds in Ontario, particularly regarding issues consumers have experienced with this type of investment product. This will help FSRA to develop effective processes, guidance and approaches in regulating the insurance sector.

Key discussion items

The Committee members discussed what they considered to be key consumer issues and risks related to segregated funds. Items raised during the discussion included:

  • Transfers of money from one fund, contract or insurer to another, including:
    • Replacement business levels across the industry;
    • Ensuring the transfers are suitable for customers;
    • Challenges in understanding when investment funds are moving to a different carrier;
  • Investors understanding the products in which they invest, particularly regarding:
    • Lack of consistency and harmonization in use of terminology;
    • Guarantees;
  • Sales charges, compensation, and access to advice for customers;
  • Insurers and insurance agencies overseeing agents who advise consumers; and
  • Risks associated with borrowing money to purchase investment products.

The Committee also discussed elements of the Canadian Securities Administrators (CSA) / Canadian Council of Insurance Regulators (CCIR) Total Cost Reporting project. The discussion included:

  • Why it would be useful to provide additional information to investors each year;
  • The differences between market value and redemption value of funds, and the possibility of adding a disclaimer to annual statements about the fluctuating redemption value;
  • The costs of investing and how to inform consumers of these costs in a way that would be most helpful to them; and
  • Challenges with calculating some of the proposed information, such as charges as a percentage of net asset value, and embedded/indirect fees.

Next steps

FSRA will reach out to Committee members to determine the next meeting date. Committee members are invited to reach out to FSRA with any additional feedback they may have.

Attendance record

Industry associations

Invitees

Title and Organization

Attendance (Y/N)

Daniel Steinkey

IFB Board member

Y

James Wood

Senior Counsel, CLHIA

Y

Eric Wachtel

Compliance Chair, Legislative Affairs, CAILBA

Y

Insurers

Invitees

Title and Organization

Attendance (Y/N)

Matt Poetker

VP Wealth Solutions, Canada Life

Y

Teri Ryan

Assistant Chief Compliance Officer & Director, Advisory, Sun Life

Y

Kelly Gonsalves

AVP & Associate Chief Counsel, Retail Insurance, Manulife

Y

Dave Howarth

SVP, Operations, Primerica

Y

Pierre Vincent

SVP, Distribution and Product Development, iA Financial Group

Y

Geoff Gibson

VP, Investment Product and Marketing, Empire Life

Y

Tamara Steinberg

VP, Legal & Compliance, ivari

Y

Colin Simpson

VP Legal & Corporate Secretary, Equitable Life

Y

Kerrie Moore

Senior Manager, Wealth Management Operations, Co-Operators Life

Y

Distributors

Invitees

Title and Organization

Attendance (Y/N)

Aly Damji

EVP Investment, HUB Financial

Y

Jules Kerlinger

Retirement Solutions Specialist, RBC Wealth Management

Y

Other 

Invitees

Title and Organization

Attendance (Y/N)

Ray Pearce

Recently retired, formerly senior wealth lawyer at Manulife, SunLife

Y

Internal 

Invitees

Title and Organization

Attendance (Y/N)

Joel Gorlick (Chair)

FSRA

Y

Huston Loke

FSRA

Y

Erica Hiemstra

FSRA

Y

Swati Agrawal

FSRA

Y

Marsha Gerhart

FSRA

Y

Sohail Deen

FSRA

Y

Fern Karsh

FSRA

Y

Tim Miflin

FSRA

Y

Chris Caldarelli

FSRA

Y

Kirubel Abebe

FSRA

Y

Jennifer Chan

FSRA

Y

Beth Elder

MOF

Y

Jessica Harper

MOF

Y

Shawkat Ferdousi

MOF

N

Available in French upon request.